When your mission changes and you don’t realize it.

Time changes all things.  Sometimes things change intentionally and sometimes they change simply because that is the nature of things.  We hire employees and managers to enact our will but their interpretation may be flawed leading to actions that go against the direction of our mission.  Sometimes they simply take the expedient route.

Moving in a direction requires effort.  Much like a ship at sea with the winds and tides trying to push it off course, our businesses are constantly being pushed and pulled in other directions.  “Your competitors price is like this.”  “I don’t care about the value, I just want the service.”  “If we don’t make an exception we will lose this customer.”  These statements all lead to erosion of the mission.

The interesting thing is, at a certain point you are no longer the one receiving these demands and your other leaders are.  Have you trained them in the right direction?  Do they know the effect of a race to the bottom on price?  Do they understand that sometimes losing a customer can be a good thing?

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Customer service and the path to business growth.

I’m not one of those people that believes the customer is always right.  I firmly believe that my job, more often than not, is to ensure the customer makes the right decisions regardless of where their mindset currently puts them.  Over at TheNextWeb they have a great article titled:  The secret to super fast growth?  Customer service.

The discussions follows the rise of several companies that built themselves up around customer service: Zappos, Amazon, Ritz-Carlton and Nordstrom.  Companies so well known for service that it goes without saying.  Each of these companies compete in highly competitive industries and each stands out because of how they treat their customers.  The ensure that the experience exceeds expectations and that the details are right.

This is a lesson all of us can take away.  Even if we don’t have a team of customer service specialists behind us, we can all find ways to make our customers’ lives a little better with our solutions.  Surprise and delight are easy to achieve.  Surprise comes from getting the unexpected – maybe an Easter Egg in your technology or a new surprise feature for free.  Delight comes from pleasure – maybe we’ve made them look really good or reduced their 40 hours of reporting a month to only 1 hour.  Maybe it’s as simple as we found an off-the-wall alternative solution that exceeds everything they were expecting.  Maybe we simply don’t use a PowerPoint presentation and instead have an old-fashioned face-to-face conversation.

Businesses grow because they increase their revenues.  Revenues increase because there are more customers.  Customers spend money with you because you provide something better or different than their other options.  Customer service is hard to do well consistently and to ingrain into a culture.  Could it be that something you do better and differently than your competition?

Engagement is the key to almost all successful ventures.

Wired ran an article on the only way to win at corporate social media: actively engaging your employees.  The point being that people want to talk about what they do, who they work for and why it is a good thing.  Giving employees an opening to do that leads to great results.  Will there be screw-ups along the way?  Of course, but having a large conversation going drowns out the stupid things that come up.

Engagement is also important between employees and clients.  An engaged client is often going to be happier and more profitable.  They know what they are getting, why they are getting it and the value of the relationship.  They are less likely to try and negotiate every single interaction.  This level of engagement comes from the same place as social media engagement by employees – employees who have been setup and positioned to have unscripted conversations knowing that their employer has their back.

As Wired points out, one of the keys to all of this is setting guidelines.  As long as I know the types of things I’ll get in trouble for saying (cursing in front of the client or just generally trying to undermine the organization usually) I can go in and tell them why they should get or grow a relationship.

99% reliability in something used daily is not very good.

Directv has recently been running a ton of commercials featuring Rob Lowe.  One of them in particular bugs me – it’s the one that talks about their 99% reliability.  Not 99.99% reliability – just 99%.  Just to verify, I went to their website which says the same thing (screengrab below):

directtvreliability

 

99% reliability.  Said another way, 99 days out of 100 it works.  Said yet another way expect to have a non-working signal between 3 and 4 days every single year.  Said yet another way, expect to have a non-working signal half a week every year.

Suddenly it doesn’t sound all that great.

They get away with it because people are generally bad at crunching these kinds of numbers.  99% reliability sounds great but imagine if 1 out of every 100 text message you sent just didn’t get through to who you were sending it to, it would cause havoc.

These things are important.  You are being told you are being sold a fairly unreliable service (in my opinion) but they are positioning it as if it is a strength because they don’t think you are going to actually do the math.

If they wanted to sell me on customer service, great – I’m buying.  If they wanted to sell me on a better user experience in general, excellent – I’m all for it.  But don’t try to pretend something bad is something good.

 

Should technology development report into sales?

This is a big and serious question.  At big, commission driven organizations sales is king.  Innovation and applications are driven by those that earn money because they are the ones that drive the business.  But can technology succeed in this type of environment?  If it’s tried and doesn’t work, is it the fault of technology or the fault of the business structure?

With several years of experience and observation in several models I’ve come to the conclusion that sales and technology development are incompatible concepts.  A sales leader does not have the focus to give a technology development organization the detailed consistency that they need to be successful.

By its very nature sales is an area that changes regularly – often daily.  Sales is responsible for meeting with lots of clients that has lots of different needs and requirements.  Every day they get new information and see new opportunities for improvement.  That information funnel is too much for a technology development team.  They get overwhelmed by the information input stream.

Technology development is a process that requires months of consistent focus.  Any new application requires 1 to 6 to 12+ months to design, build and release.  Too many changes during that release schedule leads to extra costs, schedule increases, developer frustrations, sales frustrations, and ultimately an application that doesn’t resolve the core issues that were meant to be addressed at the outset.

Yes, there is a connection between sales and technology development that must be maintained.  Sales has visibility to where the market is headed and what clients need.  But the information feed between the two needs to be filtered and managed.

Hidden changes impact Supply Chain costs – Customers

The significant relationship between each element of a supply chain is cost.  Even the process of making decisions costs money.  Every function in a supply chain is about balancing Space, Capital and Labor.  The relationships between these three areas are delicate and often hard to predict.  If a company does not regularly look at the impact of changes in their customers, suppliers and products to their supply chain it is easy for costs to slowly begin to build and add up in ways hidden on the balance sheet.

Over time, it is also more difficult to understand which costs are higher than they should be.  Costs naturally change over time, understanding which should have gone up and which are completely unnecessary becomes more difficult.  Complexity increases over time and makes understanding the current supply chain, and the optimal future state, that much more difficult.

Costs in a supply chain are largely dictated by two key factors:  customers and suppliers.  For most companies, the customer is the primary driver but often suppliers can have a significant impact as well.  As the customer or supplier bases begin to change the supply chain should react.  If it does not, there are cost increases.

The not-so-far-in-the-past Great Recession led to significant changes in consumer behavior.  All of the news channels reported on the lost jobs and drop in consumer demand.  The more subtle impact was the location of consumer across the country.  For supply chains setup to meet demand in specific areas, this relocation of demand can be a significant factor.

As the Great Recession came to an end, the consumer side of the equation was significantly changed.  People had relocated to be near family or jobs and they also now had new desires for products.  As purchasing came back it did not look the same as before.

Most supply chains spend a lot of time and money positioning to deliver the best mix of products at the lowest cost to customers which usually means being near those customers.  But when customers move and their consumption patterns change at the same time there is bound to be conflict with the supply chain setup.  This conflict is often hard to diagnose due to the complexity inherent in the natural supply chain balancing act.

Creating Solutions for clients that don’t know what they need.

Part of the issue with any technology is that it was designed with a particular audience and use case in mind. If you leave that audience or use case type then the technology is going to be less and less likely to gain traction.

However, most technology companies don’t want to create custom (or even configured) solutions for each client. Each iteration away from the main product means more maintenance, more potential for bugs, more cost that can’t be spread across the entire set of clients. Technology companies are – typically – in the business of scaling their solution.

Real estate firms are a bit different. We are in the business of serving clients that have very specific, market driven issues. If we treat them like a technology company would we guarantee that we do not get them the best solution. The number of variables that go into a good solution are immense and constantly changing (per market, client and type of location).

This is a key reason why “big” technology has yet to break into the real estate space – it doesn’t have the right mindset. Their tools and apps are typically overdesigned for the use case they are going to encounter. Even CoStar runs into the issue with their comps system. Not all comps are the same or should be matched up.

Something to think about if you are trying to do technology in the CRE space.